Live from Brainstorm - Achieving Operational Excellence with BPM

I am attending the Brainstorm BPM/SOA/Rules event in Washington DC this week and blogging as I go.

First session of day 2 was Achieving Operational Excellence with BPM with Jannelle Hill of Gartner. She discussed BPM as a management theory of business process management to use process as an organizing concept in business, not function. Complements functional orientation for operational excellence, increasingly with agility as well as more traditional benefits. She asserted, and I agree, that to some extent everything you have ever done to automate stuff is "process management" but implicit, not explicit. Not visible to business people and they cannot manipulate the transactions flowing through the process. BPM is about making all this explicit. Key issues she identified:

how can you find the inefficiencies
how can you achieve sustained operational excellent
what evidence exists to show BPM works

She went through the steps involved, the roles of business and IT, presented some example results and described what a process-driven management company might look like.

Technorati Tags: agility, BAM, BPM, BPMS, BRE, BRMS, Business Process Management, Business Rules, CEP, Event Processing, services, SOA

So, what are the steps to adopting this that she identified?

Use process as an organizational concept to breach silos (organizational and technical/application)
Business rules and process steps owned by people in the business while hand-offs made explicit and roles aligned and can identify obvious inefficiencies - automation opportunities for example. It seemed to me that this is similar to RMM level 1 where one tries to make rules explicit. Using process modeling helps identify business rules and can help identify shared rules etc.
Understand BPM and its related technology
Need an improvement lifecycle involving analysis, execution, monitor, optimize etc. Given that 80% of steps are automated in the US, IT is deeply involved and old automation does not allow rapid enough change. This means that business people must take control of some automated steps to make sure can change fast enough and this involves simulation and analysis of process and process steps. Gartner calls the technologies for this a Business Process Management Suite with a focus on real-time monitoring and execution of designs. Many IT departments might have pieces of these suites already.
Create culture of explicit process management
Analysis and modeling are key skills as simulation/testing is key (25% adoption so far). Being able to visualize and understand the model will often enable the business to immediately eliminate steps, manage them better or automate them represents the low hanging fruit that generates immediate ROI.
Develop culture of re-evaluation
Let's you iterate and so get started with something quickly and improve it - business cycles are too fast to find a "perfect" process. You don't know the end state so you keep iterating to keep improving.
Constantly re-evaluate where you are in the maturity model
Very similar to RMM for rules from acknowledging that one has processes, through automation and control of processes and then the enterprise to a truly agile business (I have blogged before about Gartner's agility model)

Janelle talked about the roles or business and IT and the impact of regulation(like Sox) which is driving business users to want to control more than the manual 20% of a process. She recommended focusing the business on the modeling of the business and the governance structures (which must be more engaging and less command and control as processes change more often). IT should relax and control the pace of change while enabling business to take control e.g. through business rules. Business people are happy to manage human workflow and forms, happy to take control of rules as long as it's parameterized and managed (see this post on helping business users take control in this way).

The response to business events was something Janelle identified as a key form of business agility. Monitoring events to see which ones are actionable and then do something. I would argue that this requires automating the responses to these events as I have argued before in this post on event monitoring and rules. She discussed the use of Business Activity Monitoring (BAM) technology but she was focused only on displaying the results to people. It was not clear if she regards automated response to events as part of BAM or if she would give it a different name (like Complex Event Processing or CEP).

Some results she presented included:

Time to deliver result in less than 4 months
No-one got less than 10% ROI while some got wild numbers (presumably when fixing really inefficient processes)
More and more companies have multiple projects
Presented on Sprint/Nextel BPM/CRM project - huge project ($9M initially) but broke-even in just 72 days with $110M in annual savings. Dramatic improvement in time to fix (hours v days) and got better data. Improved customer experience and reduced complaints while improving cycle time in responding to problems (e.g. things that drove lots of returns).

She identified best practices including strong subject mater experts, business driven partnership with IT, trial and error and so on. Pitfalls included lack of executive support; an unclear process or a lack of governance; too much modeling (both as-is and to-be)or a traditional waterfall approach; lack of skills and lack of user validation during the project. All pretty expected and all true with adopting business rules too.

Lastly she talked about a process-driven organization: